Week 1: Net-worth
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How do you know if you are heading in the right direction or not if you don't know where you are? Most people can not answer with any degree of accuracy what their net-worth is or even what should be included or not!
This week Join Katie and Alan as they explore tracking your finances, what to measure, assets and liabilities and other core personal finance principles that are going to set us up for a bright financial future. Welcome to week 1 of Rebel Finance School. You can catch up on Week 1 by watching the YouTube video to the right. The whole session was recorded for you. |
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Climbing a mountain
Whenever you start a new project it can feel daunting as there is so much to do. If you are feeling overwhelmed by the course and materials I want you to start by reading this article: The insurmountable mountain. I wrote it to help you get started on this journey.
If you are feeling good about the course and the task ahead then it is time to get right into this and take your first financial snapshot! Let's measure your net-worth!
If you are feeling good about the course and the task ahead then it is time to get right into this and take your first financial snapshot! Let's measure your net-worth!
Time to measure your net-worth
The main thing we want you to get out of week 1 is the importance of tracking your net worth. Check out my how much are you worth blog post. The blog post includes a spreadsheet template that you can download and fill in.
To get the most out of this course you must do the homework! The most dangerous words when you're learning something are "I know that". None of this is rocket science. You might know this but are you actually doing it?! Are you implementing? Some many people come on the Rebel Business School tell me they know all the content and then when I dive in and ask questions they just aren't doing it and that is why their business is failing. It is the same in finances.
Remember too that getting wealthy is not a get rich quick kinda thing. This will take time! Each step might take you months or years. We are in this for the long haul and we will help you through it. Stick with the course over the coming weeks, we've designed it to build as we go. Trust in the process! We can climb this mountain together and we'll be with you every step of the way.
To get the most out of this course you must do the homework! The most dangerous words when you're learning something are "I know that". None of this is rocket science. You might know this but are you actually doing it?! Are you implementing? Some many people come on the Rebel Business School tell me they know all the content and then when I dive in and ask questions they just aren't doing it and that is why their business is failing. It is the same in finances.
Remember too that getting wealthy is not a get rich quick kinda thing. This will take time! Each step might take you months or years. We are in this for the long haul and we will help you through it. Stick with the course over the coming weeks, we've designed it to build as we go. Trust in the process! We can climb this mountain together and we'll be with you every step of the way.
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So here is the homework for week 1...
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Optional additional homework
3. Work out how much you've earned over your lifetime. We've created a template to help you do this. Click here for the template. If you're in the US you can get this info really easily at the social security website.
4. Compare 2. (your net-worth) and 3. (your lifetime earnings). How much of what you've earned have you kept? Warning: this may bring up some emotion!
5. Discuss what you've discovered with your partner/family/friends or tell us in the Facebook group
Some questions to ask yourself
It's important to reflect during the course on what you're currently doing and what you'd like to change. Nothing changes unless you change! These are the discussion questions we had during week 1. Discuss these with your friends, partner, family, randoms in the street!
Direction and tracking net-worth
•What direction are your finances heading in?
•How do you feel about your financial direction?
•What do you think the main benefit of tracking net-worth is for you?
Gap between earning and spending
•Do you have an emergency fund?
•Have you had times where the car/washing machine broke down and you were scrambling for money?
•Do you have a gap between your income and expenditure?
•Is there money left over at the end of the month? If so, what do you do with it?
The fundamentals of good personal finance
There are three main elements to good personal finance habits. The first is reducing your spending, working out where your money goes and making sure you get good value from the money you are spending. This is week 2 of the course. The second is increasing your income to create a gap between the two, most people spend just about everything they earn each month and there is no gap between income and expenditure.
It is not always about earning more but let's be honest a few extra pounds/dollars a month won't hurt! I created a blog article and podcast episode on increasing your income to help with this. Listen or read these two.
3. Work out how much you've earned over your lifetime. We've created a template to help you do this. Click here for the template. If you're in the US you can get this info really easily at the social security website.
4. Compare 2. (your net-worth) and 3. (your lifetime earnings). How much of what you've earned have you kept? Warning: this may bring up some emotion!
5. Discuss what you've discovered with your partner/family/friends or tell us in the Facebook group
Some questions to ask yourself
It's important to reflect during the course on what you're currently doing and what you'd like to change. Nothing changes unless you change! These are the discussion questions we had during week 1. Discuss these with your friends, partner, family, randoms in the street!
Direction and tracking net-worth
•What direction are your finances heading in?
•How do you feel about your financial direction?
•What do you think the main benefit of tracking net-worth is for you?
Gap between earning and spending
•Do you have an emergency fund?
•Have you had times where the car/washing machine broke down and you were scrambling for money?
•Do you have a gap between your income and expenditure?
•Is there money left over at the end of the month? If so, what do you do with it?
The fundamentals of good personal finance
There are three main elements to good personal finance habits. The first is reducing your spending, working out where your money goes and making sure you get good value from the money you are spending. This is week 2 of the course. The second is increasing your income to create a gap between the two, most people spend just about everything they earn each month and there is no gap between income and expenditure.
It is not always about earning more but let's be honest a few extra pounds/dollars a month won't hurt! I created a blog article and podcast episode on increasing your income to help with this. Listen or read these two.
Then the final part of the fundamentals is what you do with the new found gap between income and expenditure. We will be covering this in later weeks but for now the basic steps are:
This is the start of the journey! Nice work for making it this far! Fill out that net-worth tracker and we will see you for week 2 cashflow shortly!
- Build an initial emergency fund of £1000
- Pay of Expensive Debt (greater than 5% interest)
- Increase your emergency fund to 3-6 months
- Start to invest
This is the start of the journey! Nice work for making it this far! Fill out that net-worth tracker and we will see you for week 2 cashflow shortly!
Where in the world are you?
We are a truly international bunch for Rebel Finance School 2022. This map shows where everyone is! Welcome friends from all around the world. Click on the map for the interactive version
Ask for help
Remember to reach out in the Facebook group with any questions you have or if you get stuck. Don't let confusion be an excuse for not progressing with this stuff. We are here to support you!
Update by Katie and Alan 24/05/2022
Remember to reach out in the Facebook group with any questions you have or if you get stuck. Don't let confusion be an excuse for not progressing with this stuff. We are here to support you!
Update by Katie and Alan 24/05/2022
